Atlantic City’s Ocean Resort Casino (ORC) may be going back on the auction block, despite having only been open for six months.
On Wednesday, Philly.com reported on a lawsuit filed by Joey Morrissey, former manager of an ORC nightclub, against the property’s owner, Colorado developer Bruce Deifik. Morrissey claims he was fired so Deifik could deprive him of a partnership interest Morrisey claims he was owed as part of his management agreement.
According to court documents, Morrissey’s attorneys claim Deifik is “currently seeking to sell the casino to a new buyer and is seeking to eliminate anyone with ownership interest who could thwart the sale.” When the lawsuit was filed in December, Deifik rubbished Morrissey’s claims that the property was for sale.
But there are other signs that something may be afoot. The Press of Atlantic City reported that Deifik had cancelled a planned appearance at a Thursday event hosted by the Greater Atlantic City Chamber, while the company abruptly withdrew an application to the Casino Control Commission for temporary approval of a senior executive.
It’s not quite confirmation that ORC is bleeding red ink, but there are reportedly at least two angry contractors seeking payment of $1.1m for work they performed on the property’s nightclub.
Deifik’s majority-controlled AC Ocean Walk LLC purchased ORC for $200m one year ago this week, and the property opened to the public in late June. However, the property has failed to sustain the excitement of its grand opening, and ORC’s slots-and-table revenue totaled just $11.7m in November, its third straight month of declining sales and a lower total than any of AC’s eight other venues.
The property’s only real success story to date is its new sportsbook. ORC’s sports betting revenue topped $2.8m in November, head and shoulders above any of AC’s other land-based betting operations.
Should the ORC sale rumors prove accurate, it’s hard to see who would step up to the plate this time. (Come back Glenn Straub, all is forgiven.) Prior to ORC’s debut last June, the property formerly known as Revel had sat vacant for nearly four years after declaring bankruptcy (for the second time) in September 2014.
The $2.4b Revel opened in April 2012 already tainted by failure, as Morgan Stanley bankers chose – wisely, as it turns out – to write off $932m in 2010 rather than throw more good money after bad. A series of ill-advised management decisions – including a smoke-free casino floor – pushed the property into its first bankruptcy filing in less than one year.
